The Economy Is Humming Along

CNBC is reporting today that the economic news for April is very good.

The article reports:

The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%, the lowest in a generation, the Labor Department reported Friday.

Nonfarm payroll growth easily beat Wall Street expectations of 190,000 and a 3.8% jobless rate.

Average hourly earnings growth held at 3.2% over the past year, a notch below Dow Jones estimates of 3.3%. The monthly gain was 0.2%, below the expected 0.3% increase, bringing the average to $27.77. The average work week also dropped 0.1 hours to 34.4 hours.

Unemployment was last this low in December 1969 when it hit 3.5%. At a time when many economists see a tight labor market, big job growth continues as the economic expansion is just a few months away from being the longest in history.

The growth in the economy is the result of economic policies put in place by President Trump–tax cuts, revised trade deals, cuts to regulations, and generally making the economy more welcoming to companies who want to do business in America.

The article concludes:

GDP increased 3.2% during the first quarter, far exceeding expectations, while productivity during the quarter jumped 3.6% for its best gain in five years. Pending home sales rose 3.8% in March, providing some hope in the real estate market so long as rates are held in check.

Earlier this week, the Federal Reserve held the line on its benchmark interest rate, characterizing economic growth as solid even as inflation remains tame. The central bank watches metrics like the nonfarm payrolls report closely for clues both on job creation and wage pressures.

Fed Chairman Jerome Powell said current indications point to a prolonged period of holding pat on increases or decreases in rates. President Donald Trump has said he wants the Fed to cut rates by a full percentage point.

The economy plays a big role in deciding elections. None of the policies espoused by the current group of Democrat Presidential candidates for 2020 will continue this economic growth.

A Further Step In The Wrong Direction

The media likes to think they elect Presidents. Although they have a lot of influence, they can be overcome. If Americans support President Trump, they may have to deal with an even more biased media than they did in 2016. Fox News has gone over to the dark side.

The Conservative Treehouse quotes a NewsMax article:

The parent company of Fox News has hired a former top aide to Joe Biden as its chief lobbyist in Washington.

On Tuesday the new Fox Corp., a spin-off of 21st Century Fox which just merged with Disney, became a standalone public company, controlling television assets such as Fox News and the Fox television network.

Broadcasting & Cable reported that new Fox “hit the ground running on day one” with its Washington lobbying operation headed by Danny O’Brien, a well-known Democrat.

O’Brien was brought on last October as executive vice president and head of government relations for the Fox Corp.

Previously, he had served as Senator Joe Biden’s chief of staff and went on to head Biden’s 2008 presidential campaign.

This is another indication that Fox Corp. is moving left and that Fox News may no longer be the source of objective news for conservatives. There are three obviously conservative shows left on Fox News, two of them are in the top three of the ratings for all networks. It would seem to me that if Fox News wants to keep those ratings, if is not moving in the right direction.

The article at The Conservative Treehouse explains why the hiring of Danny O’Brien is important:

Danny O’Brian now steps conveniently into the role of emissary between the Big Club and the DC political influencers, just as the Club prepares the landscape for Joe Biden.

As we said, nothing the club does is organic.

Biden will have access to unlimited financial support from the multinational Wall Street community. However, Biden’s weakness in 2020 is the same as Jeb’s weakness in 2016, a lack of grassroots support. That’s why Bernie and Beto are currently data-mining the electorate to gather up the contact info (data harvesting) for later Club deployment.

Now things are coming into greater focus…

2020 for the DNC club is shaping up identically as 2016 was for the RNC club. Again, not to beat a dead horse, but the clubs never change the playbook, only the portfolio cover.

There’s still a possibility Biden is not the DNC club’s ‘chosen one’; but the odds of that are diminishing. We keep watching…

The swamp is planning on regaining and staying in power. The only thing that will stop it is educated voters who turn out in 2020.

 

Killing A Growing Economy One Law At A Time

On January 4th, Investor’s Business Daily reported:

Since President Donald Trump took office nearly two years ago, some 4.8 million new payroll jobs have been created. That’s more than four times as many as created during President Obama’s first four years.

Hold on, you say, didn’t the unemployment rate jump from 3.7% to 3.9%? It did. Yes, but not because more people were unemployed, but because more people entered the labor force, seeking opportunities that didn’t exist before.

It’s actually a bullish sign. Some 419,000 people entered the workforce during the month, driving the labor force participation rate to 63.1%, up from 62.7% a year ago. That bellwether employment figure declined pretty consistently during the job-poor Obama years, from 65.7% when Obama entered office to 62.9% when he left. It stabilized under Trump. Last month’s 63.1% tied for the highest point since September 2013.

This rapidly improving economy is the result of President Trump’s deregulation and tax cuts. Cutting the corporate taxes and regulations resulted in manufacturing jobs returning to America (after President Obama told us they were never coming back). So why is the Democrat House of Representatives trying to undo this progress?

The Hill reported yesterday:

Rep. John Yarmuth, the new House Budget chairman, said his chamber’s budget blueprint will aim to claw back lost revenue by boosting the corporate tax rate from its current 21 percent to as high as 28 percent, with rate increases also possible for high-earning individuals.

The Kentucky Democrat said Friday he wants to mark up a fiscal 2020 budget resolution, which will outline his party’s vision for taxes and spending over the next decade, in time to reach the House floor in early April. Yarmuth said Democratic leaders have told him they want to be ready so they can set the procedural stage for passage of all 12 appropriations bills before the August recess.

Are they simply economically badly informed or is there another motive? Well first I would like to mention my favorite Milton Friedman quote, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” I think there are two forces at work here–first of all the Democrats love taxes. They believe that the more of everyone else’s money they have to spend, the more powerful they are. Second of all, Democrats with brains realize that increasing taxes will slow economic growth. Slowing the Trump economy is the only chance the Democrats have of taking the presidency in 2020. That is the plan. Hopefully the Senate will not pass the House of Representative’s budget plans. They will be harmful to average Americans. President Trump has helped average Americans economically. President Obama helped Wall Street but ignored Main Street. The House Democrats seem determined to go back to that model which ignored average Americans.

How Is The Economy Doing?

The mainstream media spends a lot of time criticizing President Trump. He is characterized as someone who is totally incompetent, undisciplined in his decision making, volatile, stupid, uneducated, etc. Yet it is somewhat amazing what this man has accomplished in less than two years–with the drag of constant accusations and investigations, a hostile press that simply ignores anything he has accomplished, and a Congress that has been less than supportive.

The Conservative Treehouse posted an article today that highlights how the Trump economy is doing.

Here are some of the highlights:

As CTH anticipated the first tabulated holiday sales report via Mastercard® shows the results of a very strong consumer confidence level.  The first report highlights a very strong 5.1% increase in holiday purchases:

“Wall Street is running around like a chicken with its head cut off, while Mr. and Mrs. Main Street are happy with their jobs, enjoying their best wage increases in a decade”…

~ Craig Johnson, president of Customer Growth Partners

…Wall Street is being impacted by their multinational reliance which is heavily weighted toward global investments. Main Street is driven by the actual U.S.A. checkbook economic factors. This is the modern disconnect. After decades of Wall Street companies investing overseas, and generating investment products that are fundamentally detached from the U.S. economy, they do not benefit from a strong U.S. economy. However, Main Street directly gains from internal U.S. economic growth.

…If you understand the basic elements behind the new dimension in American economics, you already understand how three decades of DC legislative, monetary and regulatory policy was structured to benefit Wall Street and not Main Street. The intentional shift in monetary policy is what created the distance between two entirely divergent economic engines.

The support of Main Street instead of Wall Street is one of many reasons the Washington establishment hates President Trump. Under establishment politicians Wall Street and rich investors have done very well in recent years–at the expense of Main Street. President Trump has changed that. I strongly suggest that you follow the link and read the entire article at The Conservative Treehouse. It explains in detail how President Trump’s economic policies have changed the dynamics of the American economy.

The article concludes:

Bottom Line: U.S. companies who have actual connection to a growing U.S. economy can succeed; based on the advantages of the new economic environment and MAGA policy, specifically in the areas of manufacturing, trade and the ancillary consumer benefactors.

Meanwhile U.S. investment assets (multinational investment portfolios) that are disconnected from the actual results of those benefiting U.S. companies, and as a consequence also disconnected from the U.S. economic expansion, can simultaneously drop in value even though the U.S. economy is thriving.

The American economy is improving for average Americans. The elites who have profited greatly in recent years while the rest of us struggled do not like that. Be prepared for an outright onslaught of negative news about President Trump as the middle class continues to prosper.

Raising Interest Rates Is Not The Right Move

Interest rates were kept artificially low during the Obama administration. This resulted in lower interest payments on the national debt, which increased from $7.27 trillion in 2009 when President Obama took office to $14 trillion at the end of fiscal 2016. The current national debt is $16 trillion. Increasing interest rates from 2.25 percent to 2.50 percent increases the amount of money all taxpayers will have to pay as interest on that debt.

Breitbart reported today:

“In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2‑1/2 percent,” the Federal Reserve announced. The Fed indicated the possibility of just two rate hikes in 2019.

The Dow Jones industrial average rose leading up to the announcement.

Predictions looked toward a likely rate hike ahead of the announcement and possible signaling to a slowing of potential future rate hikes. USA Today reported ahead of the announcement, “Most Wall Street pros expect the Fed, as it has signaled, to hike its key rate another quarter point to a range of 2.25 percent to 2.50 percent. This would be the fourth increase this year and ninth since late 2015.”

The Federal Reserve is not a government agency. They are supposed to be apolitical, but their actions in recent years bring that into question. Lower interest rates during the Obama administration kept the stock market high, paid dividends to those on Wall Street and any well-connected politicians. It provided the appearance of an okay economy despite decreases in the Workforce Participation Rate and the rapidly shrinking middle class. Since President Trump took office, the middle class is growing, and the Workforce Participation Rate is slowly climbing. This rate increase will increase the amount of money needed to pay interest on the national debt and will be a drag on the economy. I don’t mean to be cynical, but I believe that is by design. The Federal Reserve is part of the political establishment that does not want to see the economic success of President Trump’s economic policies. President Trump is not a member of the political establishment, and it will be more difficult to get rid of him in 2020 if the economy is growing. The rate hikes announced today will put a damper on economic growth. The question will be how much of a damper.

 

A New Face

The Washington Times reported on Thursday that Kathy Kraninger has been confirmed as the Director of the Consumer Financial Protection Bureau (CFPB) and will serve for the next five years.

The article concludes:

Meanwhile the CFPB is still facing major legal hurdles.

Some federal judges have ruled that by placing so much power — including an independent budget that Congress doesn’t control — in a single director, the CFPB violates the Constitution. But a ruling earlier this year by the full U.S. Circuit Court of Appeals for the District of Columbia upheld the singe-director structure.

Let’s take a look at the inception of the CFPB. The CFPB is the brainchild of Massachusetts Senator Elizabeth Warren. It was passed as part of the Dodd-Frank Act. The Dodd-Frank Act was Congress’ way of dealing with the housing bubble that caused the recession of 2008. However, the congressional solution was aimed at banks and Wall Street. It made no mention of the role that Congress had played in creating the housing crisis and made no effort to take responsibility for their actions or prevent a repeat of the problem.

In 1995 The Community Reinvestment Act (CRA) was changed, allowing Fannie Mae to purchase $2 billion of “My Community Mortgage” Loans, pilot vendors to customize affordable products for low and moderate income borrowers. Some of the things done to make the loans more affordable were low (or no) down payments and variable interest rates. Fannie Mae guarantees mortgages and then sells them to banks and investors. Banks were forced to issue sub-prime mortgages or pay large penalties. As more people took out mortgages, the price of houses rose quickly.  In 2005, 91 percent of Fannie Mae loans were variable rate loans. In 2004, 92 percent of Fannie Mae subprime loans were variable rate loans. Interest rates rose, gas prices increased, and people could not pay their mortgages. The subprime market collapsed, and foreclosures increased rapidly. Banks stopped making mortgage loans.

There were efforts made to stop this train. On September 11, 2003, The New York Times reported:

Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

…a new agency would be created within the Treasury Department to assume supervision  on Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The Democrats opposed the reform. Barney Frank, a Democrat from Massachusetts, said that it would mean less affordable housing. Melvin Watt, a Democrat from North Carolina, said that it would limit the ability of poor families to get affordable housing.

In 2005, John McCain warned of a coming mortgage collapse. He sponsored S.190 (109th), Federal Housing Enterprise Regulatory Reform Act of 2005. The Democrats blocked it. It was again brought up and blocked in 2007.

Opensecrets.org lists campaign contributions to politicians. Fannie Mae gave generously to insure that it would not be regulated. Some Democrats and Fannie Mae executives had ‘sweetheart’ loans from mortgage companies that were heavily involved in sub-prime mortgages.

So where am I going with this? The housing bubble was created by bad legislation. Bad legislation continues. In August 2016, The New York Post reported:

The Obama administration is doing its best to give the nation another mortgage meltdown.

As Paul Sperry recently noted in The Post, Team Obama has pushed mortgage lenders to offer home loans to folks with shaky credit, setting up conditions for another housing-market collapse.

Wasn’t the last one bad enough?

Credit scores of approved borrowers, for example, have been trending down, even as their debt levels have grown.

The Federal Housing Administration and government-sponsored “independent” lenders Fannie Mae and Freddie Mac have been demanding lower credit standards — just as the feds did starting under President Bill Clinton, in pursuit of the same “affordable housing” goal.

Some borrowers need only put 3 percent down to get a Fannie Mae loan — even if the downpayment is a gift. Fannie also has started up a new subprime lending program.

The Office of the Comptroller of the Currency recently warned that mortgage underwriting standards have slipped and now reflect “broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis.”

The Consumer Financial Protection Board (and Dodd-Frank) were not related to the cause of the 2008 recession–the recession was the result of bad laws. Both the CFPB and Dodd-Frank need to go away. They are nothing but a blatant example of government overreach.

Blue Collar Workers Under Trump Economics

The Conservative Treehouse posted an article today about how President Trump’s economic policies are impacting average American workers. The article points out that previous economic policies have been beneficial to Wall Street, but not beneficial to the average American. President Trump has changed that.

The article reports:

Overall wage rate growth in Q2 now at 2.8% year-over-year.  That is great news. However, the better news is the red emphasis, White and Blue Collar middle-class wage rate growth is well over 3%.  The wage growth is broad-based amid almost all sectors.  [Trucking and transportation at 3.4% (Table 8)]

As the wage rate increases, and as the economy expands, the governmental dependency model is reshaped and simultaneously receipts to the U.S. treasury improve.

More money into the U.S Treasury and less dependence on welfare/social service programs have a combined exponential impact. You gain a dollar, and have no need to spend a dollar – the saved sum is doubled. That is how the SSI and safety net programs are saved under President Trump.

When you elevate your economic thinking you begin to see that all of the “entitlements” or expenditures become more affordable with an economy that is fully functional.

As the GDP of the U.S. expands, so does our ability to meet the growing need of the retiring U.S. worker. We stop thinking about how to best divide a limited economic pie, and begin thinking about how many more economic pies we can create.

The article includes the following:

It is wonderful to see everyone who wants to work prosper.

Much-Needed Change Is Coming

The Conservative Treehouse posted an article today about the changes being made to America‘s trade policy.

The article notes:

For those who follow closely the strongest argument against the U.S. trade and economic policies of the past 30 years has been the outcome. We don’t need to guess what the pro’s and con’s of the U.S. Chamber of Commerce position is, we are living them. We don’t need to guess what the Wall Street economy delivers, we are living through them.

For the past 30 years the U.S. has lost jobs, wages have been depressed, and the middle-class has suffered through the implementation of economic trade policy that destroyed the U.S. manufacturing base. None of this is in question – the results stare us in the face – yet the Wall Street and multinational corporate club(s) [U.S. CoC chief among them] now demand a continuance of the same.

It seems logical that if something is not working it needs to be changed. Somehow that has escaped Wall Street and the U.S. Chamber of Commerce. Actually, one wonders if the current program is working for the interests of Wall Street and the U.S. Chamber of Commerce.

The article further states:

The truth is, well, two points: •Point #1 – the media don’t want to know; they are committed to selling the prior policy. •Point #2 – there’s almost no-one within the professional economic punditry class who have ever given thought to what happens during the space between two fundamentally different economic policies as executed.

What happens in the space between taking the U.S. economy off the path of ‘service-driven-globalism’, and reasserting the economy back to a balanced ‘production-based national economy’? None of the key participants within the larger discussion have ever contemplated this dynamic.

The article explains why Wall Street does not support changing trade policy:

When Main Street economic principles are applied Wall Street will initially lose. There’s no way for this not to happen. Most of Wall Street is built on the Multinational platform of economic globalism. Weaken the grip of the multinational corporations and financial interests on the U.S. economy and Wall Street will drop… this is not difficult to predict. This is also necessary.

U.S. stocks, centered around U.S. domestic companies, will go up. U.S. stocks, centered around multinational companies, will go down.

As Secretary Wilbur Ross, U.S.T.R. Robert Lighthizer and U.S. President Trump have previously affirmed, they are going to restore the U.S. manufacturing and production economy -OR- lose office trying.

The U.S. Steel and Aluminum tariffs are just one component of the larger economic issue. Bringing back U.S. production on those sectors is vital to the infrastructure of a manufacturing and production economy.

Additional steps will come from exits of NAFTA and renegotiated trade deals with ASEAN nations, China and Europe. We either have a stable broad-base economy, or we follow the former path and eventually lose the country.

President Trump was chosen to lead America out of the economic mess of the prior eight years. It is interesting to see the amount of opposition he has encountered doing this.

A Year Later

On Friday, Investor’s Business Daily posted an article detailing the impact of President Trump‘s economic policies. The fact that President Trump is a businessman rather than a politician has had an impact on his economic decisions and thus on the American economy. How has that worked out?

The article reports:

Stock market: The Dow Jones industrial average rose about 31% over the past year, “more than any other president since Franklin Roosevelt,” CNBC.com reminds us. Total stock market wealth added since Trump’s first inauguration: $5.5 trillion.

Jobs: Over the last year, 2.2 million jobs were added to the economy, as the unemployment rate fell from 4.8% to 4.1% currently. Minorities experienced their lowest unemployment rates ever in December 2017, after a year of solid gains. Unemployment claims, meanwhile, are at a 45-year low.

GDP: President Trump entered office amid what appeared to be a dangerously slowing economy, with just 1.2% growth in the first quarter of 2017. But growth immediately picked up, rising to 3.1% in the second quarter, 3.2% in the third quarter, and, based on recent data, 3% or higher in the final quarter of 2017 — making the longest stretch of 3%-plus GDP growth since 2005.

Tax cuts: Trump’s $1.5 trillion in tax cuts lowered the corporate marginal rate from 35% to 21%, and cut rates sharply for middle-class and lower-income Americans. The results are in: Less than three weeks after the tax bill became law, more than 164 companies — ranging from AT&T and Apple to Visa and Wal-Mart — have announced pay hikes and special bonuses for their workers. Apple stunned markets last week, announcing it would bring $245 billion back from overseas, hire about 20,000 new workers and hand out bonuses of around $2,500 for each of its employees due to tax cuts.

Confidence: Our IBD/TIPP Economic Optimism Index stands at 55.1, well above the 49.3 average over that measure’s lifetime, signaling continued confidence in the strength of the economy. The optimism index is close to its all-time high and has now been positive — above 50 — for 16 months. Meanwhile, a separate IBD/TIPP index for financial stress is at its lowest since we began measuring it in 2007.

Regulation: Trump fulfilled his promise to cut more rules than he enacted. Indeed, he eliminated 22 regulations for every regulation he added, cutting some $8.1 billion in costs. More important, he pulled out of the ruinous Paris Climate Deal, which the NERA economic consulting group estimated would cost the U.S. some $3 trillion in compliance costs over the lifetime of the deal.

I can’t help but wonder if those who are protesting President Trump have 401k accounts and if they have checked their balances lately. Are the people protesting invested in the American economy in any way? Do they have jobs? Are they looking for jobs? And last of all, are we again dealing with paid protesters?

A Picture Of The Obvious

Yesterday The Washington Examiner posted an article about the media’s coverage of President Trump as compared to previous Presidents.

The graph below is from the article:

Wow.

On November 23,  The National Review posted a list of some of President Trump’s accomplishments as of Thanksgiving:

The Dow Jones Industrial Average, NASDAQ, and S&P 500 all hit record highs on Tuesday. The Wilshire 5000 Index calculates that some $3.4 trillion in new wealth has been created since President Trump’s inauguration and $5.4 trillion since his election. Fueled by the reality of deregulation, expectations of lower taxes, and a new tone in Washington that applauds free enterprise rather than excoriate it, the economy is on fire. 

Atop the second quarter’s 3.1 percent increase in real GDP, and 3.0 in 3Q, the New York Federal Reserve Bank predicts that 4Q output will expand by 3.8 percent. This far outpaces the feeble average-annual GDP growth rate of 1.5 percent on President Obama’s watch. Meanwhile, the IMF expects global GDP to rise by 3.5 percent this year. So much for a Trump-inspired “global recession.”

Unemployment is at 4.1 percent, a 17-year low. New unemployment claims in September were at their most modest since 1974. Goldman Sachs on November 20 “lowered our unemployment rate forecast to 3.7 percent by end-2018 and 3.5 percent by end-2019.” According to the Wall Street powerhouse’s chief economist Jan Hatzius, “Such a scenario would take the U.S. labor market into territory almost never seen outside of a major wartime mobilization.”

American companies have been expanding operations here rather than shipping jobs overseas. Corning, for instance, announced a $500 million investment in new U.S. production, launching 1,000 positions. 

Foreign firms have been unveiling facilities and creating jobs in America. Insourcing is now a thing. Taiwan’s Foxconn will spend $10 billion on a new Wisconsin electronics plant with 3,000 new employees. During Trump’s recent visit to China, Beijing agreed to invest $84 billion in new energy projects in West Virginia.

Add to that the future impact of the tax cuts and the repeal of the ObamaCare mandate, and most Americans will be better off next year than they have been for a number of years. To paraphrase a recent campaign slogan, “Are you better off now than you were before President Trump took office?” Hopefully enough people will answer that question honestly before they vote in the mid-term elections.

At some point Americans who depend on the mainstream media for their news are going to look at the contrast between what they are being told and what they actually see. That may be the end of the mainstream media.

It Just Keeps Dripping

Paul Mirengoff posted an article at Power Line today reporting major gaps in Hillary Clinton’s appointment calendar during her tenure as Secretary of State.

The article reports:

AP has identified at least 75 meetings that Hillary Clinton had with longtime political donors, Clinton Foundation contributors, and corporate and other outside interests that were not recorded (or not properly recorded) on her State Department calendar. AP identified the meetings by comparing her calendar with separate planning schedules supplied to Clinton by aides in advance of each day’s events.

In many cases, Clinton’s State Department calendar simply excluded the meeting altogether. On other occasions, the names of those with whom she met were omitted.

It seems clear that the omissions were made to obscure Clinton’s ties to tycoons and big donors. For example, in one omission, Clinton’s State Department calendar dropped the identities of a dozen major Wall Street and business leaders who met with her during a private breakfast discussion at the New York Stock Exchange in September 2009.

The first thing to notice here is that the search for this information was initiated by the Associated Press. Usually the press is supporting Hillary Clinton. Since the press tends to be aligned with the Democratic Party, this is an interesting development.

The article further reports:

AP had to go to court to pry from the State Department the records it needed to expose this latest example of Clinton’s lack of transparency and her ties to the wealthy.

The AP first sought Clinton’s calendar and schedules from the State Department in August 2013, but the agency would not acknowledge even that it had the material. After nearly two years of delay, the AP sued the State Department in March 2015.

The department agreed in a court filing last August to turn over Clinton’s calendar, and provided the documents in November. After noticing discrepancies between Clinton’s calendar and some schedules, the AP pressed in court for all of Clinton’s planning material.

The U.S. has released about one-third of those planners to the AP so far.

Is this a person we want in the White House?

 

It Makes A Good Talking Point, But It Isn’t True

On Thursday, Investor’s Business Daily posted an editorial about the impact of the Dodd-Frank regulations on the banking industry. Both Hillary Clinton and Bernie Sanders have hailed Dodd-Frank as the solution to the problems that caused the 2008 financial meltdown. Unfortunately, if Dodd-Frank is the solution, they have misunderstood the problem.

The article reports:

In their recent debate on MSNBC, both Hillary Clinton and Bernie Sanders bashed Wall Street and the banks, blaming them for the financial meltdown and subsequent record-slow economic recovery.

Sanders, a socialist, called Wall Street and the banks “criminal” and “corrupt” and implied that he would jail CEOs at big financial companies for their “illegal activity.”

And Clinton issued a literal threat: “You know, we now have power under the Dodd-Frank legislation to break up the banks.” Doubling down, she said that she now wants the same power over investment banks, insurance companies, mortgage companies and others.

Blaming banks and Wall Street might have populist appeal, but it’s false. In his definitive analysis of the financial crisis, “Hidden In Plain Sight,” Peter Wallison, who served on the Financial Crisis Inquiry Commission, showed that it was the systematic weakening of mortgage lending standards under the U.S. government’s own housing policies that led to the meltdown — and to the phony call by Democrats to go after Wall Street and the banks.

The editorial includes a chart showing the number of regulations that were imposed on banks as a result of Dodd-Frank:

EDIT3_banks2_021216

The article reports the result of Dodd-Frank:

Banking consultant Eric Grover of Intrepid Ventures recently wrote in The American Banker, “Under Dodd-Frank, new bank formation has essentially ceased.” The data are shocking: From 2011 to 2014, just one new commercial bank and no new savings banks were chartered. In the 15 years before Dodd-Frank, an average of 140 new commercial banks and 15 new savings banks were chartered each year. While small banks are going out of business at a record rate due to regulatory costs, big banks with over $50 billion in assets are now “too big to fail.”

The American economy does better when the government stays out of our business–not when the government over-regulates things.

Improving Your Image On A False Premise

On Friday, Investors.com posted an article about Elizabeth Warren‘s objections to the budget bill because of bank risk.

The article reports:

Warren last week took to her socialist soapbox to try to torpedo the “cromnibus” spending bill. She warned legislators they would be blamed for another financial crisis if they dared to vote for any appropriations legislation that includes anti-Dodd-Frank provisions.

Pontificating from the Senate floor Thursday, Warren railed against Republicans and fellow Democrats alike for adding a provision to the bill to restore to banks the right to use derivatives to hedge risks for customers.

She claimed repeal of the regulation “would let derivatives traders on Wall Street gamble with taxpayer money and get bailed out by the government when their risky bets threaten to blow up our financial system.”

Added Warren: “These are the same banks that nearly broke the economy in 2008 and destroyed millions of jobs. The same banks that got bailed out by taxpayers and are now raking in record profits.

“A vote for this bill is a vote for taxpayer bailouts of Wall Street,” she continued.

But where was she three days earlier, when Fannie and Freddie unveiled new low-income mortgages with just 3% down payments? The move encourages the kind of risky lending that actually caused the crisis, yet she didn’t say a peep.

The taxpayer bailouts of Wall Street go back to the Community Reinvestment Act, passed by Jimmy Carter and revised in 1994 to repeal some restrictions on interstate banking.

The article explains what actually happened:

The “main culprit” in the housing crisis was Fannie and Freddie and their mission regulator, HUD, which was cheered on by affordable-housing zealots in the House like Warren’s pal Barney Frank.

HUD pressured Fannie and Freddie to make high-risk loans to “underserved” borrowers, and to do that they had to lower their underwriting standards to the point where they were buying as many subprime loans as prime. While HUD was enforcing its affordable-housing quotas, down payments plunged along with credit scores.

When the housing price bubble burst, those loans were the first to default. When the music stopped, a whopping 77% of all the bad loans ended up on the books of Fannie and Freddie and other federal agencies — not Wall Street banks.

The evidence of government guilt in the crisis is overwhelming. Yet Warren keeps up the false narrative.

Unfortunately, that false narrative has been used for so long that uninformed voters believe it. Part of what is needed to change the politics of Washington is an educated voter. Until voters learn to look past what the mainstream media is telling them, the government will continue to make reckless decisions that result in taxpayer money being used to correct government mistakes.

News Stories That Only Report Half Of The Truth

Yesterday the BBC posted a story about the role of Russia and China in the financial collapse in the United States in 2008. The article notes that the Russians and the Chinese considered creating a financial crisis in the United States, but did not act on the idea.

The article reports:

Now this is where we enter the territory of a geopolitical thriller. Mr Paulson:

“Here I’m not going to name the senior person, but I was meeting with someone… This person told me that the Chinese had received a message from the Russians which was, ‘Hey let’s join together and sell Fannie and Freddie securities on the market.’ The Chinese weren’t going to do that but again, it just, it just drove home to me how vulnerable I felt until we had put Fannie and Freddie into conservatorship [the rescue plan for them, that was eventually put in place].”

For me this is pretty jaw-dropping stuff – the Chinese told Hank Paulson that the Russians were suggesting a joint pact with China to drive down the price of the debt of Fannie and Freddie, and maximize the turmoil on Wall Street – presumably with a view to maximizing the cost of the rescue for Washington and further damaging its financial health.

Paulson says this guerrilla skirmish in markets by the Russians and Chinese didn’t happen.

Now wait a minute. Even if the Russians and Chinese decided to manipulate American markets, the housing bubble was a result of the policies of the American Congress–no one else is to blame.

I have posted the YouTube video “Burning Down the House” before, but in case you missed it, here it is again. This video explains the cause of the 2008 financial meltdown. The information included in the video is a matter of public record, but has not been widely reported.

Please watch the video and draw your own conclusions.

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Is There Really An Economic Recovery?

Yesterday the Daily Caller posted an article on our current financial recovery from the financial crisis of 2008.

The article reports:

Less than half of Americans’ per-capita wealth that was lost in the government-boosted property bubble has been recovered by mid-2013, says a new White House report that is intended to help President Barack Obama trumpet his economic accomplishments.

Adjusted for inflation and population growth, only 45 percent of wealth lost during the recession has been recovered, and many of the hardest hit households did not benefit as much from the rebound in [Wall Street] financial assets prices,” the report admits.

I suspect that part of the fact that the lost wealth has not been recovered is due to the fact that a good deal of that wealth was in the housing bubble. You can easily make the case that it was not real wealth–it was part of a bubble. However, the jobs numbers are real, and they are pathetic.

The article reports:

But Obama’s economic report has so many gaps that it fails to mention today’s unemployment rate, or even the 20 million Americans who are unemployed or underemployed.

The report does declare that “over the past three and a half years, our businesses have created seven and a half million new jobs.” But the population also has grown 7 million, from 306.8 million in 2009, to 314 million in 2012, partly through the arrival of roughly 5 million immigrants.

…The report doesn’t mention the Supplemental Nutrition Assistance Program, or food stamps, even though enrollment in the program has dramatically increased over Obama’s tenure, from 28 million recipients in 2008 to 47.7 million recipients in June 2013.

The labor force participation rate currently stands at 63.2 percent according to Bureau of Labor Statistics data. In a very odd twist of fate, the people who voted for President Obama are also the ones hit hardest by the recession and so-called recovery. In view of their own economic survival, I strongly suggest that the low-information voters become informed voters before they vote again.

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About That Unequal Distribution of Wealth Thing

When Occupy Wall Street was protesting, one of its claims was that the ‘fat cats’ on Wall Street were getting richer while everyone else was getting poorer. They claimed to be fighting for a more equitable distribution of wealth. Of course, corporations have always been charged with overpaying their executives while underpaying those in the lower levels of the work force. However, in these protests, one area of ‘unequal distribution of wealth’ has been overlooked.

Today’s Washington Examiner posted an article about the increases in the pay for union leaders that is occurring as union membership decreases.

The article reports:

The only thing keeping Big Labor from becoming an incidental factor in the American workplace is that government employees are five times more likely to be unionized than those in the private sector.

The article further states:

A total of 428 private sector union leaders were paid at least $250,000 annually, and the top 100 of those made more than $350,000, according to a study of Department of Labor data by Media Trackers, a conservative, nonprofit investigative watchdog group. The highest-paid union leaders work for organized professional athletes, with G. William Hunter, executive director of the National Basketball Players Association, who received $3.2 million. The only government employee union leader in the top 10 is Gerald McEntee, international president of the Association of Federal, State, County and Municipal Employees, whose $1.2 million compensation put him fourth on the list.

I have no problem with people being compensated for what they do, but if you are going to complain about what corporate executives earn, you need to also look at what union leaders are paid.

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Where Are The Fact Checkers ?

Yesterday CNS News reported that despite President Obama’s statement on Thursday that “we got back every dime we used to rescue the financial system,” the Congressional Budget Office (CBO) has stated that the government will lose about $24 billion on the bailout.

On Thursday, President Obama stated, “We got back every dime we used to rescue the financial system, but we also passed a historic law to end taxpayer-funded Wall Street bailouts for good.”

The article reports the CBO’s statement:

“The cost to the federal government of the TARP’s transactions (also referred to as the subsidy cost), including grants for mortgage programs that have not yet been made, will amount to $24 billion,” said the CBO report, which was released on the same day Obama spoke.

…CBO said that the cost of TARP “stems largely from assistance to American International Group (AIG), aid to the automotive industry, and grant programs aimed at avoiding home mortgage foreclosures,” noting that the losses will be so large they will eclipse the financial gains the government will realize from bailing out other large financial institutions.

It really is time to tell the truth about how American taxpayer money is spent and to rein in the budget.

 

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I Obviously Have Pursued The Wrong Career

National Review Online posted a story today about Harry Reid‘s wealth and some of his investment history. Harry Reid was a law student who worked part time to put himself through law school. He has been a public servant for all be two years of his work history. His current salary is $193,400, basically higher than it has been during his working life. Harry Reid’s current net worth is between 3 and 10 million dollars. Obviously, this man is an investment genius–he should be on Wall Street.

When Harry Reid began his career in the Nevada legislature in 1982, he was worth between 1 and 1 1/2 million dollars.

The article at National Review details some of Senator Reid’s strategies for acquiring wealth. They involve such things as questionable land deals and insider stock trading. The land deals are clearly at the edge of legality; the insider trading, although legal at the time for Congress, is now illegal.

The Democrats have attacked Mitt Romney for being rich. He has been accused of everything from soup to nuts. However, no one is disputing the fact that he made his money honestly through hard work and intelligence. It is also to his credit that he started from scratch–he did not inherit his father’s wealth. It is amazing to me that an honest, successful businessman would be so strongly attacked while the source of the Senate Majority Leader’s wealth is overlooked.

One of the things I would like to see happen in November is to have the voters elect a Congress that is interested in the prosperity of American citizens–not using the office to line Congressional pockets.

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Is Fairness Really The Issue ?

Investors.com posted an article yesterday about President Obama’s speech declaring that his policies would bring ‘fairness’ to America. Unfortunately, all President Obama’s policies have brought is shared misery.

The article reports:

But by Obama’s own measure, the country has gotten more “fair.” The richest 1% now pays almost 40% of all federal income taxes, up from 25% two decades ago, while the bottom half pays only 2%, down from 6%. The federal regulatory state has never been as big, and government spending as a share of the economy is at record levels.

What’s unfair is what these policies have produced — a woeful economic recovery that’s hurt the middle class the most.

In fact, as IBD reported recently, the only winners since Obama took office have been corporations (profits are up 68%) and Wall Street investors (the Dow’s up more than 45%). The rest of the country has gotten the shaft.

The article further reminds us that since President Obama took office, unemployment is higher, house prices are lower, and inflation is beginning to rise. Since the recession supposedly ended in June 2009, household income has dropped almost 7 percent.

The article also reminds us that:

And income inequality — which was flat during the Bush years — has started to rise.

What we have now is crony capitalism. Solyndra and other ‘green’ companies staffed by President Obama’s fundraisers have received large amounts of money from the government in the past year, as have many Wall Street firms. Meanwhile the rest of us are struggling to keep up.

The only economic fairness President Obama has brought us is shared misery. We need to remember this in 2012–regardless of who the Republican candidate is.

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Barney Frank Retires

The Hill is reporting today that Barney Frank will not be running for reelection in 2012.

The article reports:

His legislative legacy is likely to be the Dodd-Frank financial reform bill that passed in 2010 in the wake of the Wall Street meltdown that sent the economy into a tailspin in 2008. Hailed by the Obama administration, the law has drawn sharp criticism in the Republican presidential nomination fight, and one leading contender, former Speaker Newt Gingrich (R-Ga.), even suggested that Frank be jailed, along with Dodd, for their support of the mortgage giants Fannie Mae and Freddie Mac in the lead up to the financial crisis.

I suspect that if the Republicans take two branches of government in the 2012 election, Dodd-Frank will be revised or repealed. It was a legislative solution that never addressed the actual cause of the problem. Representative Frank’s statements in the years before Fannie Mae and Freddie Mac’s collapse declaring that the government would not be on the hook if the companies went bankrupt are a matter of record. His role in making home loans available to people not able to pay them back is also a matter of record.

With the recent redistricting in Massachusetts, I now live in Barney Frank’s district. It will be interesting to see exactly what happens next.

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It May Be Part Of Our Future, But It Is Not Part Of Our Present

 Steven Hayward posted an article at Power Line about some recent events in the quest for green energy. On Friday, the Huffington Post reported that the lithium-ion batteries in the Chevy Volt have caught fire after being involved in crash tests. The fires did not occur immediately–in one instance the car was being stored in a parking lot of a test facility in Burlington, Wisconsin.

Meanwhile, Google has abandoned its quest for running its data center entirely on green energy.

The article reports:

Meanwhile, Google has quietly abandoned an alternative energy program that it launched with great fanfare just two years ago.  Google’s “Renewable Energy Cheaper than Coal” project featured all the hallmarks of the pie-in-the-sky energy mongers, especially the “it’s-just-around-the-corner” trope.  Google’s green energy czar at the launch, Bill Weihl, predicted that renewable electricity cheaper than coal would be achieved quickly: “In three years, we could have multiple megawatts of plants out there.”

The article also reports on Google’s other investments in green energy:

“Google’s stakes in the wind farms are ‘tax equity’ investments, in which investors buy into a project and use federal tax credits granted to the project to offset their own taxes.”

Remember all the uproar from Occupy Wall Street about corporate welfare? This is what corporate welfare actually is–the government granting a tax break to a company that funds the government’s pet project. This is what crony capitalism is about. Taxes and government are being used to control the behavior of corporations. When you consider that many of the major investors in green energy companies are key players in Congress, this begins to look really ugly.

Green energy is a wonderful idea. I suspect we will see it actually work sometime in the near future. However, pouring government money into a technology before it is ready for prime time is not a wise move.

 

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It Wasn’t Like They Were Consuming Transfats Or Smoking

Rudy Giuliani

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Today’s New York Post posted a commentary on why Mayor Bloomberg in New York City finally decided to evict the Occupy Wall Street protesters who had taken over Zuccotti Park. Things had truly gotten out of hand–some of the occupiers had contracted scabies, lice and various lung ailments. It was not a healthy place. It kind of makes you appreciate the luxuries of civilization.

The article reports:

An administration source insisted that Bloomberg gave the go-ahead to roust the protesters because of “an accumulation of things” — including concerns that the park became a firetrap and that protesters were planning to build wooden structures to prepare for winter.

But sources familiar with Bloomberg’s decision said he also was concerned with public health.

The article further reports:

And Hizzoner didn’t like being called out by former Mayor Rudy Giuliani for his inactivity.

A couple of weeks ago, Giuliani said that he would never have tolerated people sleeping in the park and that the city should kick the protesters out.

I suspect a lot of New York City residents and people who work in the city miss Mayor Giuliani.
Occupy Wall Street had one valid point–the economy is in bad shape and people are having a hard time being upwardly mobile. Unfortunately, they were protesting the wrong people–they should have camped out outside the White House and Congress–that is where the regulations and tax policy that is crippling our economy is coming from. At any rate, it’s time for the protesters to go home and become productive members of society. If they don’t like the way things are, they need to find a constructive way to get involved and change things–but they should get their facts straight first.
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I Never Felt At Risk At A Tea Party Rally

I went to my first Tea Party event in Providence, Rhode Island, in 2009. Due to my husband’s work schedule and the fact that I am a total wimp about driving in Providence, I was only there for the last hour. I saw young families with children, grandparents and college students. There was no violence–there wasn’t even any litter that I saw. I never felt uncomfortable, and I really don’t look like I would be a very difficult target to attack. In 2010 I attended a Tea Party rally in Worcester because Worcester is part of my voting district. Same story.

Fast forward to 2011 and the Occupy Wall Street movement. I understand that New York City generally has more crime than either Providence or Worcester, but there is still some semblance of order in New York City (or so I thought). Hot Air reported yesterday that the Occupy Wall Street group at Zuccotti Park has set up a ‘safe’ tent for women to protect them from the rapes that have occurred at night in the Occupy Wall Street settlement. I suppose I should be grateful that the group cared enough to set up a ‘women only’ tent to protect women from rape, but it bothers me that these ‘concerned citizens’ would have a problem with rapists within their group.

Hot Air reports on the double standard in reporting the Tea Party and Occupy Wall Street:

This can’t be repeated enough: With a few exceptions, foremost among them the New York Post, the coverage of OWS protests compared to the coverage of tea-party protests is the worst media double standard in recent history. Nothing compares, because nothing else involves this much distortion on both ends of the coverage. It’s not just that most press outlets (like the protesters themselves) look the other way at depravity happening inside Obamaville, it’s that for years they treated the tea-party movement as some sort of feral mob that was forever on the brink of rampaging through the streets — like, say, Occupy Oakland just did. If you missed it when I posted it last week, go watch the ad the DNC ran in August 2009 when tea partiers first started showing up to town halls on ObamaCare. That set the tone. We began the year with tea-party pols being smeared as killers over a shooting they had nothing to do with and we end it with actual rapes being shrugged off by the press because they’re bad PR for a movement they support. Disgrace.

That pretty much sums it up.

These are two of my pictures from the Providence Tea Party. This group is about as wholesome as groups can be!

 

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Have You Wondered What Happened To ACORN ?

 

Washington, DC, February 8, 2005 -- Acting Dir...

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Fox News reported on Thursday that New York Communities for Change (NYCC), the new incarnation of Association of Community Organizations for Reform Now (ACORN) in New York, is desperately attempting to cover its connections to Occupy Wall Street.

The article reports:

Officials with the revamped ACORN office in New York — operating as New York Communities for Change — have fired staff, shredded reams of documents and told workers to blame disgruntled ex-employees for leaking information in an effort to explain away a FoxNews.com report last week on the group’s involvement in Occupy Wall Street protests, according to sources.

NYCC also is installing surveillance cameras and recording devices at its Brooklyn offices, removing or packing away supplies bearing the name ACORN and handing out photos of Fox News staff with a stern warning not to talk to the media, the sources said.

Please follow the link above to read the entire article. There is an amazing section in the article which involves around a discussion of whether or not paying people to carry signs is paying them to protest. The article cites a quote from Jonathan Westin, NYCC’s organizing director, when staffers confronted him with the fact that the group was paying protesters:

‘No your job is to fight for economic and social justice. We just send you to protest.’
That kind of logic makes my head hurt.

 

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Occupy Wall Street Branches Out

 

A Grad rocket hit in Beer Sheba during the 200...

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Israel National News is reporting today that a group of thugs attempted to barge into the Israeli Consulate in Boston to protest Israel’s seizure of the Canadian-Irish flotilla ships that attempted to sail to Gaza.  I would like to remind anyone who agrees with these thugs that the naval blockade of Gaza has been declared legal under international law.

According to the Israel Ministry of Foreign Affairs:

A maritime blockade is in effect off the coast of Gaza. Such blockade has been imposed, as Israel is currently in a state of armed conflict with the Hamas regime that controls Gaza, which has repeatedly bombed civilian targets in Israel with weapons that have been  smuggled into Gaza via the sea.

Considering the number of rocket attacks on Israel that have originated in Gaza, this makes perfect sense.

The Israel National News further reports:

The activists were “spillovers” from the Occupy Boston protests, one of many Occupy Wall Street protests, some with anti- Semitic undertones, being held in the U.S. demanding social justice. At least three people have been arrested on drug charges in the protests over the past several days, and police report numerous knife fights between homeless individuals who are participating in the protests. Police also report a significant rise in vandalism in downtown Boston.

If Occupy Wall Street does actually represent more than 5 percent of the American population, we are in serious trouble.

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